Personal Finance Flashcards
What is healthy giving?
when you want to give back or pay it forward and the result is positive emotions
What is unhealthy giving?
when giving is a method of gaining power over another
What do financial statements do for you?
assess the overall financial position to evaluate pros & cons of giving - creates a plan for special events that involve giving
How do you earn stuff?
choose a career that can help you meet your giving goal - a career choice could be an ultimate form of giving - and be grateful to those that have giving to your growth of human capital
Savings and Investing
emergency savings should be established prior to giving - savings and investing are valuable avenues to give
Risk Management
Ensure you have planned for life events and accounted for such expenses prior to giving
What are forms of giving?
being kind to another - knowledge - money - skill - talent - items
Whats good about healthy giving?
your are giving out of excess in your life
Whats bad about unhealthy giving?
does not enhance the well-being of both the receiver and giver
How should you prepare for giving?
create a spending plan - evaluate needs, wants and values - assess your time - plan for expenses, such as Christmas gifts - avoid using credit for giving
specific gifts
particular item or property in an estate transferred to beneficiary on owner’s death. specifics must be provided
Non-specific gifts
does not refer to specific item. (all my personal possessions)
Residuary gifts
everything left in estate after all debts, bills and taxes have been paid and specific and non specific gifts have been distributed
Gifts to children
executors will keep for safekeeping gifts to children under 18 until they become of age unless will specifies guardian or parents take receipt of gift on child’s behalf
Gifts to charities
gifts left to charity in will are free from inheritance tax.
What can giving through a will or trust provide?
provides for the future financial security of your family and others
What can a will or living trust offer?
can offer thoughtful charitable gifts as part of a long-range estate and financial plan
what can giving a charitable donation in your will do for you?
can support the causes that were important to your during your lifetime
Gifts included in wills and living trust are what?
flexible, easy to arrange, and may be changed with your life circumstances
A gift made through a will or living trust can be prepared by who?
an attorney
grantor
person who forms the trust and supplies the assets
trustee
person named in the trust to administer the trust according to the terms and state trust law
beneficiary
the person for whose benefit the trust property is held by the trustee
intent from grantor
must have a valid legal purpose
property
asses subject to the trust
a trust can be…
revocable, revoked or modified at any time or irrevocable, not modified or revoked unless by special permission of court to terminate it
testamentary trust will
sets up one or more trusts for some of the estate assets to be distributed upon the grantor’s death.
A testamentary trust is created in what?
in a will by a testator who bequeaths his/her property to beneficiaries.
trust
an agreement that determines how a person’s property is to be managed and distributed during lifetime and upon death.
This trust allows what?
the testator to control how the property will be divided.
Living trust
trust in which you assign the managemtn of your assets to a trustee while you are living
revocable living trust
living trust that can be dissolved
irrevocable living trust
living trust that cannot be changed
What can an irrevocable living trust provide?
income to the grantor
will
legal document by a person, the testator, that names one or more persons, executor, to manage his or her estate and provides for the distribution of property upon death. It can also identify a preferred guardian for any surviving children.
what is the purpose of a will?
Ensures the estate is distributed as desired
Beneficiaries (heirs), the persons specified in will receives a part of an estate
To prevent the courts from assigning an administrator who may not carry out your wishes.
A Living Will
a document to make your family aware of the type of care you want to receive if you should become terminally ill, on life support or permanently unconscious. This document is only effective in the event you are unable to express your wishes yourself
Oral Will
spoken testaments given before witnesses. Not widely recognized from a legal perspective
Testamentary Will
formally prepared document signed in the presence of witnesses.
Holographic Will
written without the presence of witness. Rarely hold up in court.
estate planning
a clear and complete plan of what should happen upon your death
trade-offs
is giving up one thing for another
Attorneys
can provide you insights for titling documents, wills, etc…
Accountants
can help you determine net worth, see tax advantages
Certified Financial Planners
can help you diversify investments, protect assets
Primary Functions of estate planning
peace of mind, maintain control, protect assets for yourself and loved ones, avoid probate
Consequences of no planning
may need a guardianship, medical wishes may not be carried out, court decides who raises your minor children, heirs may unnecessarily incur estate taxes.
a will can be what?
A Will can be written by any person of legal age and being of sound mind and memory
What does a will ensure?
It ensures that your assets will be given to family members or a designated beneficiary
what happens if you die without a will?
If you have no heirs and die without a will, the state can claim the estate.
